<p>Perth’s new apartment market recorded its strongest quarter of sales since Q4 2021, with 412 apartments sold in Q1 2026 and a record quarterly sold value of $537 million, according to Urbis’ latest Apartment Essentials results.</p>

<p>Urbis said the March quarter result reflects strong, highly product‑specific demand across both ends of the market, from more attainable projects delivering at scale, through to premium stock being absorbed by equity‑rich downsizers.&nbsp;</p>

<p>David Cresp, Partner at Urbis, said the key story in Perth is not demand, it is the market’s ability to convert demand into delivered housing.&nbsp;</p>

<p>“This is the strongest sales quarter since Q4 2021, and it reinforces that demand in Perth is real and it’s local,” David Cresp said. “But the task now is delivery, turning that demand into projects that can actually be built and completed.”&nbsp;</p>

<p>[smartcode_project:default project_id=110291 project_image_fid=302785]</p>

<h2>Affordable product leads, premium demand remains resilient</h2>

<p>Sales in Q1 were led by more affordable projects, with The Boulevard (SKS Group) recording 115 sales in the quarter, the presentation noting this is only the second time a single project has surpassed 100 quarterly sales. The project was able to offer more affordable housing product right next to a train station.&nbsp;</p>

<p>Palmyra West (Finbar) also delivered strong results with 28 sales in Q1, following 84 sales in Q4, with an average price of under $800,000, underscoring depth of demand for well‑located, attainable new stock.&nbsp;</p>

<p>At the premium end, Urbis said downsizer demand is continuing, with the results highlighting Romeo (Applecross, Finbar) recording 75 sales and reaching almost 50% sold in one quarter.</p>

<p>Jual (Shenton Park, Celsius Property) also posted a strong quarter with 28 sales, reaching 39% sold in one quarter.</p>

<p>Urbis noted that Perth apartment demand is not speculative, not investor‑led, and not uniform, describing it as localised, often equity‑driven and highly product‑specific, a pattern reflected in the polarisation between strong “attainable” performers and premium downsizer product.&nbsp;</p>

<p>[smartcode_project:default project_id=148957 project_image_fid=364102]</p>

<h2>Prices underpinned by costs, and the delivery risk is growing</h2>

<p>Urbis said pricing pressure is cost not demand‑driven: construction costs and delivery risk are now a central constraint, with the results noting build costs remain elevated and volatile, and that energy, fuel and labour uncertainty weigh on feasibility.</p>

<p>David Cresp said a growing challenge for private Build‑to‑Sell developers is simply securing a builder in the current environment.</p>

<p>“Developers are really feeling the pressure from a building market that was operating at capacity and securing a builder is challenging,” David Cresp said, adding that even where a builder can be secured, “trying to get to the price that makes the development financially viable is incredibly challenging in the current market.”&nbsp;</p>

<p>Urbis’ broader WA commentary also notes that industry remains at or above capacity with lot and housing creation, and that many builders are limiting new sales to manage stretched workforces and fixed‑price contract pressures, conditions that flow directly into apartment feasibility and delivery timing.</p>

<p>[smartcode_project:default project_id=108869 project_image_fid=317905]</p>

<h2>Supply: improving later, but still constrained, and Perth lags eastern benchmarks</h2>

<p>While near‑term supply remains constrained, Urbis’ forecast shows completions lifting “Supply is forecast to be back above 1,500 apartments per annum for the first time since 2019”, with 1,775 completions forecast for 2026, and volumes remaining above that level over the following years.&nbsp;</p>

<p>Looking further ahead, completions are forecast to reach 2,500 in 2028, with the report noting 32% of that total is social/affordable, reflecting the role of government‑supported delivery in rebuilding the pipeline.&nbsp;</p>

<p>However, Urbis said Perth remains behind comparable markets on pipeline scale. In a national comparison of projects under construction, the report shows under construction Perth Build‑to‑Sell (BTS) at 3,446 apartments versus the Gold Coast at 7,922. Mr Cresp said “The challenge for Perth is how to we grow the delivery pipeline”.</p>

<p>Urbis’ conclusion is that Perth’s market is increasingly defined by product discipline and delivery certainty, with the research identifying “delivery certainty is key” and calling out builder risk and procurement models as core success factors, alongside “timing and staging”.&nbsp;</p>


Joel Robinson

Perth apartment sales hit strongest pace since late 2021 as builder capacity tightens

<p><a href="https://www.apartments.com.au/developers/sammut-developments">Sammut Group</a> has secured development approval for its latest Brisbane apartment project, marking the Sydney developer’s next step in expanding its Queensland pipeline following the success of its debut Gold Coast development, Coast.</p>

<p>The approved project at <a href="https://www.apartments.com.au/new-apartments/44-glen-road-toowong-qld-4066">44 Glen Road, </a><a href="https://www.apartments.com.au/developments/toowong-qld-4066">Toowong</a> will deliver a 15-storey riverfront apartment building with 42 residences, significantly increasing the scale of the site’s previous approval for a smaller luxury scheme. Designed by Bureau^proberts, the development will comprise a mix of predominantly four-bedroom and two-bedroom apartments positioned to maximise Brisbane River and city views.</p>

<p>Sammut Director Julian Sammut said the group had been actively searching Brisbane for several years before identifying Toowong as the right fit.</p>

<p>“Brisbane was the right step for Sammut,” Sammut said.</p>

<p>“With the success of Coast we thought we should definitely look to do more in Queensland alone. We then pushed up to look at Brisbane. We've been looking for I'd say two to three years actually and it was hard to find the right location.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/f_auto,c_limit,w_1440,q_75/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/field/image/Screenshot%202025-12-23%20at%203.27.14%E2%80%AFPM.png?VersionId=dYAVIL7qdcGA8ojvkslSrLjczXFejSSx" /></p>

<p>Sammut said suburbs including New Farm and Teneriffe were considered before the group ultimately focused on Toowong due to its strong downsizer demographic and limited supply of developable riverfront land.</p>

<p>The site was acquired off-market after what Sammut described as a lengthy negotiation and planning process, with the developer pursuing an uplift to the original approval.</p>

<p>“We are DA approved now which is very exciting,” Sammut said.</p>

<p>“We've had our change approval come through and we've obviously doubled the height, 15 storeys plus rooftop. We've got 42 amazing apartments that are going to be coming to market soon.”</p>

<p><img alt="Sammut makes Brisbane apartment play" data-entity-type="" data-entity-uuid="" src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,dpr_2.0,q_auto:good/https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202025-12-23%20at%203.27.26%E2%80%AFPM.png?VersionId=ohkRkY0dIZlqdfME2EZePsCQavRiBadE" /></p>

<p>Bureau^proberts said the design responds to Toowong’s evolving urban character, balancing contemporary apartment living with the area’s established residential identity.</p>

<p>“A place where traditional Queensland living has taken place for centuries; Toowong is seeing a shift of contemporary influence, commercial and retail hubs mixed with well-considered residential offerings – all the while maintaining its character and charm,” the architect noted in planning documents submitted to Brisbane City Council.</p>

<p>The architecture practice said the project’s form was shaped by its riverfront setting, flood considerations, neighbouring building scales, and view corridors.</p>

<p>“They said the mix of four and two-bedroom apartments capture the ‘fundamental qualities of Queenslander living,’ translated into the context of a contemporary subtropical building.”</p>

<p>The development sits just off Coronation Drive within walking distance of Toowong’s retail precinct and the upgraded Regatta ferry terminal, while also benefiting from proximity to the incoming green bridge connection to West End. Sammut said the accessibility and amenity offering were central to the site’s appeal.</p>

<p>The approval adds to growing residential activity along the Toowong riverfront, joining nearby projects including Consolidated Properties’ Monarch Residences and Spyre Group’s ARC Residences.</p>


Sammut secures approval for debut Brisbane apartment development in Toowong

<p>Developer Lanevick is heading back into Sydney’s apartment market after focusing more heavily on the luxury townhouse and terrace sector in recent years.</p>

<p>Lanevick, founded and directed by Steve Maroun, is expecting to receive approval in the coming months for a new apartment development in Gladesville, with the aim to launch it to the market later this year.</p>

<p>The 51-apartment project, designed by Studio Johnston, will comprise a mix of one-, two-, and three-bedroom apartments positioned toward the Hunters Hill downsizer market.</p>

<p>“Traditionally it’s been difficult for people in that market to downsize because there just hasn’t been the right product available,” Maroun said.</p>

<p>“We’re targeting buyers who might have 30 to 40 per cent of their house value sitting in the bank after downsizing.</p>

<p>“They still want good spacious entertaining areas, they still want quality design, but they also want flexibility and the ability to enjoy life a bit more after working hard for a long time.”</p>

<p>The project sits near Boronia Park and within close proximity to the Parramatta River foreshore, an area Maroun says offers more of a Hunters Hill lifestyle than a traditional apartment precinct.</p>

<p>“From a lifestyle perspective, it’s really more Hunters Hill than Gladesville,” Maroun said. “You’re close to the foreshore, close to parklands, and still connected back into the village precinct.”</p>

<p>From level four and above, apartments will capture water views&nbsp;toward Sydney Harbour. Communal amenity will include rooftop entertaining areas, wellness spaces, and a gym tailored toward owner-occupier buyers.</p>

<p>“We’ve really designed these apartments around that buyer coming from the Hunters Hill LGA and what they’re actually looking for in their next chapter.”</p>

<p>The proposed development has also been designed to respond to the changing character of the broader Gladesville town centre, where a growing number of mixed-use and residential proposals are expected to emerge over the coming years.</p>

<p>“Gladesville presented a rare opportunity to deliver a genuinely design-led residential project within an evolving lifestyle precinct, just moments from the growing Gladesville town centre, and we’ve approached the project with a strong focus on architecture, liveability and long-term community value,” Maroun said.</p>

<p>Maroun said Lanevick saw a first-mover advantage within the precinct as planning controls continue to evolve to accommodate greater housing density.</p>

<p>“We think there’s a real opportunity there that hasn’t really been serviced properly yet,” he said.</p>

<p>“There’s going to be a broader evolution of the whole Gladesville village precinct over time, particularly with more activation and mixed-use outcomes.”</p>

<p>The Venus Street proposal will include a commercial and retail component at ground level designed to contribute to that evolving streetscape activation.</p>

<p>“A big part of the thinking was how do you activate that area properly and create more vibrancy and amenity, which is what Hunters Hill has been looking for,” Maroun said.</p>

<p>Lanevick’s focus since 2020 has largely been on smaller-scale luxury townhouse and terrace developments. The developer recently completed Royale Randwick, also designed by Studio Johnston, where prices reached $3.65 million. The project was featured in the UDIA NSW 2026 Professional Development Prospectus and was also named a finalist for Development of the Year.</p>

<p>&nbsp;</p>


Lanevick to cater for Hunters Hill downsizers with new Gladesville apartment development

<p>Property developer One Living, backed by former Macquarie banker turned investment manager Chris Green’s investment firm, has unveiled plans to bring more institutional capital into housing to help address the national supply crisis.</p>

<p>The New York-based investor has focused his firm, GreenPoint Partners, on addressing the supply shortage hitting middle market housing in Australia.</p>

<p>It is backing the new One Living business to develop more than 1000 units along the eastern seaboard. The new firm is starting with a development on Mona Vale Road, on the border of Mona Vale and Pymble, in Sydney’s Northern Beaches, with around 140 apartments planned. They are eyeing off more sites across the city.</p>

<p>With cost pressures rising in the industry, One Living’s model is to be a vertically integrated developer-builder, so it can respond directly to the housing gap by removing the cost inefficiencies embedded in traditional residential delivery.</p>

<p>“We are building a platform designed to operate at scale and starting in a market where there’s a clear need for quality, attainable housing,” One Living joint managing director Joseph Scuderi said.</p>

<p>“It’s that missing middle – it’s that attainable end of housing… that’s what most Australians invest into and what Australians can actually afford.”</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="798dfa93-4941-4db6-a696-31e9dc18e81c" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.31.50%E2%80%AFPM.png?VersionId=mKBqi5C_DmeiXS.AtJkcR8LQIxqCqmFi" /></p>

<p>GreenPoint Partners brings years of experience assembling and scaling real estate operating businesses across major markets. And Green sees a big opportunity in Australia.</p>

<p>“For its size, sophistication and importance to the community, Australia’s living sector has remained largely under-institutionalised, which represents significant opportunity,” Green said. “GreenPoint identified that gap, assembled the right team, and is backing One Living to build a platform that is aligned to market needs.”</p>

<p>Green said being a builder-developer would give the company the capacity and flexibility it required to deliver reasonably-priced homes.</p>

<p>“We want it to be at that attainable level; not super high end luxury but at that attainable level,” he said.</p>

<p><img alt="Mona Vale" data-entity-type="file" data-entity-uuid="74a5344a-4b26-4d4a-ada3-056b1220be77" src="https://s3.ap-southeast-2.amazonaws.com/www.urban.com.au/s3fs-public/inline-images/Screenshot%202026-05-28%20at%202.32.15%E2%80%AFPM.png?VersionId=vY8hXHO4reBMdO8ZXMWCNtGZJofUPQ3j" /></p>

<p>&nbsp;</p>

<p>One Living will undertake a component of affordable housing in its schemes, which it will own and operate, and it could also run build-to-rent on some sites.</p>

<p>Green praised local policy settings.</p>

<p>“The NSW government is being very supportive, strategic and pragmatic in terms of how do we generate more supply of housing,” he said. “We think it’s actually positive for development and the bit that’s been lacking at that attainable level is that it’s lots of relatively small private developers, whereas we want to create an institutional platform.”</p>

<p>One Living is also&nbsp;looking at high-density projects and could take on more institutional funding in the future.</p>

<p>“The way we will be able to achieve economies of scale is through size,” Green added.</p>


One Living enters Sydney's new apartment market with Northern Beaches site acquisition

<p>It's been several years since there's been an opportunity to buy a brand new townhome in Melbourne's coastal suburb of Mordialloc. Even apartment developments in recent times have been few and far between in the area.</p>

<p>Local developer LDS Property identified the gap in new housing, securing a site on White Street, directly opposite&nbsp;Woodlands Golf Club Mordialloc. They've recently launched&nbsp;<a href="https://www.apartments.com.au/new-townhouses/wm-residences-mordialloc-102-white-street-mordialloc-vic-3195">WM Residences</a>, just 13 townhouses which they have already started building.</p>

<p>Projects by Buxton Director Heath Thompson, who is selling WM Residences, says the townhouses x that perfect middle ground be</p>

<p data-end="683" data-start="511">"Mordialloc residents have had limited options to downsize within the suburb, often forcing them to look elsewhere despite long-standing ties to the area," Thompson says.</p>

<p data-end="882" data-start="690">"With very little comparable new supply coming to market, projects like WM Residences are well placed, particularly as buyers look to capitalise on current conditions amid constrained supply."</p>

<p data-end="882" data-start="690">[smartcode_project:default project_id=134646 project_image_fid=6109]</p>

<p>The development, designed by regarded architecture firm&nbsp;<a href="https://www.apartments.com.au/architects/ewert-leaf">Ewert Leaf</a>,&nbsp;adopts a deliberately restrained architectural approach, focusing on simplicity, durability and liveability rather than overt design gestures.</p>

<p>The boutique scale is central to the offering. With only 13 three-bedroom residences, each home is configured to prioritise functional layouts and everyday use, supported by private terraces and secure two-car garages.</p>

<p>Ewert Leaf’s design response leans into a calm, neutral material palette. Interiors are defined by oak flooring, white walls and soft finishes, creating a consistent and understated backdrop. The approach avoids trend-driven detailing in favour of longevity, with an emphasis on natural light and spatial clarity.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6110]</p>

<p>Beyond aesthetics, the homes are designed to meet contemporary performance expectations. Each residence targets a minimum 6-star energy rating, incorporating double glazing, comprehensive insulation and all-electric Bosch appliances.</p>

<p>The project’s location supports a walkable coastal lifestyle, sitting within close proximity to Mordialloc’s foreshore, Main Street retail strip and the train station. Local cafés and dining venues, including Suburbia Deli and Hendriks Café, are within a short walk, reinforcing the area’s established neighbourhood character.</p>

<p>[smartcode_project:default project_id=134646 project_image_fid=6116]</p>

<p data-end="247" data-is-last-node="" data-is-only-node="" data-start="0">While <a href="https://www.apartments.com.au/developments/mordialloc-vic-3195">Mordialloc</a> is often defined by its beach and pier, the project taps into other areas of day to day living, offering easy access to local food, casual dining and transport, rather than positioning itself purely as a lifestyle retreat.</p>

<p>WM Residences reflects a continued trend across Melbourne’s coastal suburbs towards smaller-scale, design-led townhouse developments, particularly on infill sites where proximity to amenity is already established.</p>

<p>With construction commenced prior to its market entry, the project aligns with a growing preference among buyers for developments with visible progress and defined delivery timeframes.</p>

<p>[smartcode_project_cta:default project_id=134646]</p>


WM Residences fills gap in Mordialloc townhouse market

Forecast

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<p>The ANZ has raised their 2018 house price forecasts.</p>
<p>It expected prices to rise 2 per cent nationally this year, higher than the 1.4 per cent increase it predicted two weeks ago. </p>
<p>It comes just two weeks after their most recent update.</p>
<p>It suggests the likelihood the next Reserve Bank of Australia rate rise won't come until next year would push up dwelling prices faster this year than previously expected. </p>
<p>The lender expects the central bank to raise rates twice next year.</p>
<p data-gtm-vis-recent-on-screen-7770372_137="3822" data-gtm-vis-first-on-screen-7770372_137="3822" data-gtm-vis-total-visible-time-7770372_137="4000" data-gtm-vis-has-fired-7770372_137="1">"We've changed our view on the RBA – our expectation now is for no hikes in 2018 and two in 2019 – which is a positive for the model's forecasts in 2018," the bank said.</p>
<p data-gtm-vis-recent-on-screen-7770372_137="3822" data-gtm-vis-first-on-screen-7770372_137="3822" data-gtm-vis-total-visible-time-7770372_137="4000" data-gtm-vis-has-fired-7770372_137="1">"This is offset to an extent by the slightly lower than forecasted price growth in Q1, which means that momentum will be less of a positive for the forecast than previously though."</p>
<p>Under the new forecasting model ANZ said on Wednesday it had introduced, it predicted dwelling price growth next year of 4 per cent.</p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/4/19/FORECAST.jpg" target="_blank">to enlarge.</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/4/19/FORECAST.jpg" alt=""></p>
<p>This was also higher than the 3.6 per cent gain that ANZ predicted two weeks ago. </p>
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<p>It noted actual house price growth for Q1 2018 underperformed relative to the model's expectations.</p>
<p>The bank had previously gone out on a limb suggesting there would be two rate rises during 2018.</p>
<p>Meanwhile the latest ANZ-Property Council Survey shows that optimism in the property sector has remained elevated as 2018 progresses.</p>
<p>Nationwide confidence rose to the highest level on record, with improvement across all states and territories.</p>
<p>"The convergence across the country continues," the report noted.</p>
<p>"We have previously highlighted the trend improvements in Western Australia and Queensland, but South Australia has been a quiet achiever, and is now the most optimistic region in Australia."</p>
<p>It also noted the outlook for the housing sector is improving as expected construction activity has slowly picked up, and a large backlog of work will underpin activity this year.</p>
<p>"Price expectations are also stabilising in positive territory, with the exception of New South Wales," it noted.</p>
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<p><span>Most su</span><span>rvey respondents still expect residential property values to increase over the next year, with the notable exception of New South Wales. </span></p>
<p><span>Western Australia is the most optimistic region, with a net 53% of respondents expecting to see prices rise from here.</span></p>
<p><span> In New South Wales, a net 11% of respondents expect prices to decline in the next 12 months. </span></p>
<p><span>"We believe that the worst of the price falls are now behind us, Sydney included," the survey suggested.</span></p>
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<p>But it’s not all smooth sailing for the economy as the retail sector has been under pressure for some time, and respondents are increasingly pessimistic about the outlook for the next 12 months.</p>
<p>"Expectations of price growth and construction activity in the retail sector are falling, and any improvement feels some time away," the report authors, Daniel Gradwell and David Plank  noted.</p>
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j.ballantyne1990-6AQqhLzZaK

ANZ says house prices will rise 2 percent in 2018, higher than recent 1.4 percent forecast

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<p>Sydney's apartment market has challenges emerging as new supply increasingly comes on line and banks continue to tighten funding to investors.</p>
<p>There was little potential for further unit price growth, according to BIS Oxford Economics.</p>
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<p><span>Apartment development has increasingly moved from inner Sydney suburbs to the city’s middle ring, it noted.</span></p>
<p><span>After accounting for around 29% of total apartment building approvals in 2010/11, middle ring Sydney suburbs comprised 40% of apartment building approvals in 2016/17.</span></p>
<p><span>Two bedroom apartments account for most of the Sydney stock.</span></p>
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<p><span>Suburbs </span><span>report, which covers the Local Government Areas of Sydney (below), and profiles indicators relating to demand, supply, rents and prices. </span></p>
<p><span><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/2/15/SUBURBS.jpg" alt=""></span></p>
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<p><span>STOCK DEFICIENCY </span></p>
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<p><span>Underlying demand for dwellings increased over the four years to June 2017 on the back of strong population growth. Low interest rates have allowed pent up demand to be </span>released into the market.</p>
<p>Underlying demand rose to an estimated peak of 42,500 dwellings over 2016/17, well above the average of 32,600 dwellings pa over the previous five years.</p>
<p>However, dwelling completions surged far ahead of underlying demand. Annual completions doubled from 23,100 starts in 2012/13 to an estimated 47,200 starts in 2016/17.</p>
<p>This has seen the underlying dwelling deficiency slowly eroded since 2014/15.</p>
<p>Over 2017/18, completions are forecast to remain strong while underlying demand is expected to ease as net interstate outflows rise. This will lead to a further decline in the level of stock deficiency </p>
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<p><span>APARTMENT OCCUPIERS </span></p>
<p><span>Two bedroom apartments account for the majority of the Sydney apartment stock, at 56% of occupied apartments at the 2016 Census. Moreover, studios and one bedroom apartments account for another 29% of Sydney’s occupied apartment stock, with the remaining 15% containing three or more bedrooms. </span></p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/2/15/BEDROOM%20TYPE.jpg" target="_blank">to enlarge.</a></p>
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<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/2/15/DEMAND.jpg" target="_blank">to enlarge.</a></p>
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<p><span>The households occupying apartments are reflective of the composition of the apartment stock. Studio and one bedroom apartments are dominated by lone person households (who accounted for 55% of total studio and one bedroom apartments), while two bedroom apartments have a more even split of lone person, couple without children and family with children households, at around 25-30% each. </span></p>
<p><span>In comparison, family with children households were the most prevalent household type in three bedroom apartments (40% of households). </span></p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/2/15/APARTMENT%20HOUSES.jpg" target="_blank">to enlarge.</a></p>
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<p><span>Studio and one bedroom apartments are dominated by rental tenants, who account for 76% of households. In contrast, only 12% were fully owned suggesting that studio and one bedroom apartments are not attracting downsizers. Around 74% of two bedroom apartments were renting. Households with a mortgage accounted for the larger share at 18%. In contrast, a high share of three bedroom apartments were owner occupied (43%), with a high percentage (18%) being fully owned. This suggests that many owner occupiers in three bedroom apartments are downsizers and are buying with full equity. </span></p>
<p><span>APARTMENT SUPPLY </span></p>
<p><span>The high density sector has benefited most in this upturn in the Sydney market. High density building approvals more than doubled from 13,500 approvals in 2012/13 to 30,100 approvals in 2016/17. While there has also been a moderate upswing in house approvals, the medium density sector has remained flat. Inner Sydney has traditionally attracted the greatest amount of high density activity, although the middle ring has begun to account for a greater share of high density dwelling approvals. The deterioration of affordability in Sydney has encouraged a shift towards both apartments over houses, and also activity from inner to middle regions.</span></p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/2/15/tenure.jpg" target="_blank">to enlarge.</a></p>
<p><span><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/2/15/tenure.jpg" alt=""></span></p>
<p><span>RENTS, PRICES AND YIELDS </span></p>
<p><span>As the market picked up, median price growth for units averaged 9.1% per annum between 2012 and 2017. This price growth was fairly even geographically across the Inner and Middle regions of Sydney, ranging from 10.8% per annum in Eastern Suburbs to 7.3% in the Middle West.</span></p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/2/15/approvals.jpg" target="_blank">to enlarge.</a></p>
<p><span><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/2/15/approvals.jpg" alt=""></span></p>
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<p><span>The result has been that indicative unit yields have now fallen below their previous lows of 2005, to be 3.6% in June 2017. This would suggest little potential for further unit price growth (and eventually the possibility of price declines), as occurred during the mid-2000s. A smaller dwelling deficiency and tightening restrictions on investor activity will also add drag to market sentiment. </span></p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/2/15/greater.jpg" target="_blank">to enlarge.</a></p>
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jrobinson-rf4aSBido9

Little potential for further Sydney unit price growth: BIS 

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<p>Although 2017 saw the usual worry list – around President Trump, elections in Europe, China, North Korea and Australian property – it was good for investors. Balanced super funds had returns around 10%, which is pretty good given inflation was around 2%. This year has started favourably but volatility may pick up as geopolitical threats loom a little larger and US inflation rises. This note provides a summary of key insights on the global investment outlook in simple dot point form. </p>
<p>Five lessons from 2017</p>
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<li>The global economy is finally emerging from its post-Global Financial Crisis (GFC) hangover. Talk of secular stagnation was overdone. Slow global growth since the GFC largely reflected a typical constrained aftermath from a major financial crisis.</li>
<li>The withdrawal of extreme monetary stimulus won’t cause economic chaos if central banks don’t move too quickly and recovery is entrenched – this is clear in the US where the Fed has now been able to move away from zero interest rates and start reversing quantitative easing.<br><br>
</li>
<li>The Eurozone is far more resilient than many give it credit for – with voters across numerous countries opting for centrist pro-Euro parties as opposed to the populist parties that many said were going to sweep to power./<br><br>
</li>
<li>Turn down the noise – retreating to cash on talk of war with North Korea, worries about Trump, ahead of elections in Europe and perennial talk of a property crash in Australia – would have been costly in terms of missed returns.<br><br>
</li>
<li>Stick to an investment strategy – 2017 had its share of distractions for investors but they would have done okay provided they stuck to an investment strategy that prevented them from getting blown around by various scares.</li>
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<p>Key themes for 2018 </p>
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<p>• Still in the sweet spot for investors – a further rise in global growth to around 3.9%, driving solid earnings growth with continuing low inflation and easy global monetary conditions should keep investment returns favourable.</p>
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<p>• But expect more volatility as US inflation stirs, the Fed hikes more than the market expects, other central banks edge towards less stimulus and political risk increases.</p>
<p>• Apart from the likelihood of more volatility through the year, global shares are likely to trend higher through 2018 on the back of rising earnings and still easy monetary conditions.</p>
<p>• Australian shares are likely to do okay but underperform global shares with returns around 8% with moderate earnings growth. Expect the ASX 200 to reach 6300.</p>
<p>• Commodity prices are likely to push up with global growth. • Low yields and capital losses from a gradual rise in bond yields are likely to see low returns from bonds.</p>
<p>• Unlisted commercial property &amp; infrastructure are still likely to benefit from the search for yield, but it is waning and listed variants are vulnerable to rising bond yields.</p>
<p>• National capital city residential property price gains are expected to slow to around zero as the air comes out of the Sydney and Melbourne property boom and prices fall by around 5%, but Perth and Darwin bottom out, Adelaide and Brisbane see moderate gains and Hobart booms.</p>
<p>• Cash &amp; bank deposit returns to remain poor at around 2%.</p>
<p>• After a short-term further bounce higher, the $A is likely to fall against the $US as the gap between the Fed Funds rate and the RBA’s cash rate goes negative. Solid commodity prices will provide a floor for the $A, though.</p>
<p>Seven things to watch </p>
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<p>• President Trump – the risks around the Mueller inquiry and renewed political pressure from the mid-term elections risks more populist policies (with trade conflict with China and Mexico and a possible escalation with North Korea and Iran high on the list) after the business-friendly policies of 2017.</p>
<p>• How quickly US inflation turns up – a rapid upswing would see a far more aggressive Fed, a strong rise in the $US and bond yields, and pressure on emerging market shares.</p>
<p>• Bond yields – a rapid rise in bond yields would be bad for shares and assets that benefitted from the search for yield.</p>
<p>• The March Italian election – the Five Star Movement is likely to do well, which may create investor angst, but they are unlikely to be able to form government and are less anti- Euro. Moreover, support for the Euro remains high in the rest of Europe so Italy is unlikely to trigger a domino effect.</p>
<p>• Whether China, post the Party Congress, embarks on a more reform focussed agenda, slowing short-term growth.</p>
<p>• The Sydney and Melbourne property markets in Australia – too fast a slowdown could threaten broader growth.</p>
<p>• Global business conditions indicators (PMIs). </p>
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<p>Four reasons why global growth is likely be strong </p>
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<p>The post-GFC hangover has faded with high levels of confidence helping drive stronger investment and consumer spending. Self-sustaining growth has returned.</p>
</li>
<li>
<p>Global monetary conditions are still easy. While some fret about a flattening US yield curve, this is unlikely to signal a growth downturn because it’s been driven by rising short rates rather than falling long rates, high demand for long bonds as a portfolio diversifier and continuing QE in Europe and Japan holding down global and hence US bond yields.</p>
</li>
<li>
<p>Fiscal austerity has faded, with the US seeing stimulus.</p>
</li>
<li>
<p>We have not seen the excesses – massive debt growth, overinvestment, capacity constraints or excessive inflation – that normally precede recessions. </p>
</li>
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<p>Three reasons why a grizzly bear market is unlikely</p>
<p>Shares are overdue a decent correction and even a brief (or gummy) bear market (where shares fall 20% but are back up a year after) is possible. But a deep (or grizzly) bear (where shares fall 20% and a year after are even lower) is unlikely: </p>
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<p>A recession is unlikely with growth more likely to accelerate. Most grizzly bear markets are associated with recession.</p>
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<p>Short-term sentiment measures are bullish but longer-term sentiment and positioning suggests investors are far from euphoric. (Some of the euphoria may have even been siphoned off to schemes like Bitcoin!)</p>
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<li>
<p>The liquidity backdrop for shares is still positive, with low rates still providing an inducement to allocate to shares. </p>
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<p>Three reasons why risks around Trump may rise a bit</p>
<p>For 2017, we expected Trump the business-friendly pragmatist to dominate, but there are several reasons why we may see a bit more of Trump the populist in 2018:</p>
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<p>Much of his business-friendly policy agenda has been implemented notably tax reform and deregulation. So the good news from these sources is largely behind us.</p>
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<li>
<p>The Mueller inquiry is getting closer to Trump. We don’t see the Republicans impeaching Trump unless there is clear evidence of wrongdoing. Even if he is replaced by Vice- President Pence, policy wouldn’t change much – but markets may worry about it and this may be intensified if Trump lashes out and creates populist distractions.</p>
</li>
<li>
<p>The mid-term Congressional elections in November (with polling pointing to the GOP possibly losing control of the House) will see a renewed focus on issues around trade (as evident in just imposed US tariffs on solar panels &amp; washing machines) and inequality as Trump tries to boost his base.</p>
<p>But the 2016 fears around Trump are still unlikely to be realised – he has a focus on growth and jobs and won’t want to threaten this. A full ontrade war with Mexico or China is unlikely as a surge in consumer prices won’t go down well with his base. </p>
</li>
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<p>Three reasons why the trend in bond yields is likely up</p>
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<p>Deflation risks have retreated and are being replaced by inflation risks as global spare capacity is being gradually used up (led by the US) and commodity prices trend higher.</p>
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<p>Long bond yields remain well below levels consistent with nominal growth of around 3-3.5% in developed countries.</p>
</li>
<li>
<p>Bonds are over-loved with a huge post-GFC inflow. </p>
</li>
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<p>Three reasons why Chinese growth won’t slow much </p>
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<p>The Chinese Government’s tolerance for a sharp slowing in growth is low given the risk of social instability it may bring.</p>
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<p>Monetary &amp; fiscal policy has not been tightened significantly.</p>
</li>
<li>
<p>In the absence of much lower savings (the main driver of debt growth), rapid deleveraging would be dangerous. </p>
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<p>Five reasons Australia won't have a recession (again) </p>
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<p>A downturn in the housing cycle and uncertainty around the consumer are the main risks facing Australia but against this:</p>
<p>• The drag from falling mining investment has faded.<br> • Non-mining investment and infrastructure spending are turning up.</p>
<p>• National income is no longer falling as commodity prices have stabilised or are trending higher.</p>
<p>• Stronger export volumes from resource projects like LNG and stronger global growth will provide an additional boost.</p>
<p>• Interest rates can still fall further if needed.</p>
<p>The next move in Australian interest rates will likely be up, but the RBA will wait for more confidence on growth &amp; that inflation has bottomed before starting to gradually hike later this year. </p>
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<p>Five reasons to expect more share market volatility </p>
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<p>• As US inflation rises it will likely result in a more aggressive Fed than the market is allowing for.</p>
<p>• Geopolitics may be a bit more negative than it was in 2017 if Trump becomes more populist.</p>
<p>• Volatility indexes like VIX are around record lows and net speculative short positions on VIX (bets volatility will fall further) are near record highs, warning of some reversal.</p>
<p>• Low volatility years like 2017 often lead more volatile years. • The US share market is expensive on some measures. </p>
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<p>Three reasons Bitcoin is a bad “investment” </p>
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<p>• It’s impossible to value, generating no income flow – making it highly speculative (as evidenced in extreme volatility) and subject to a crowd-driven mania (as we saw in 2017).</p>
<p>• New supply potential is huge – eg, from other crypto currencies and futures trading which is allowing easy shorting and syphoning away demand.</p>
<p>• Governments are likely to ramp up regulation of it, are unlikely to give up their monopoly of legal tender (and the “seigniorage” they earn from it) and will likely develop their own crypto currencies using block chain. </p>
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<p>Nine things investors should remember </p>
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<p>The power of compound returns – saving regularly in growth assets can grow wealth substantially over long periods. Using the “rule of 72”, it will take 29 years to double an asset’s value if it returns 2.5% pa (ie 72/2.5) but only 9 years if the asset returns 8% pa.</p>
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<p>The cycle lives on – markets cycle up and down and we need to allow for it and not get thrown off by rough patches.</p>
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<li>
<p>Diversify – don’t put all your eggs in one basket.</p>
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<li>
<p>Turn down the noise – increasing social media and the competition for your eyes and ears is creating much noise around investing that is really just a distraction.</p>
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<li>
<p>Starting point valuations matter – for example still low bond yields will mean low medium term bond returns.</p>
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<li>
<p>Remember that while shares can be volatile, the income stream from a diversified portfolio of shares is more stable over time and higher than the income from bank deposits.</p>
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<li>
<p>Avoid the crowd – at extremes it’s invariably wrong.</p>
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<li>
<p>Focus on investments with sustainable, decent cash flows – not financial engineering and schemes like Bitcoin.</p>
</li>
<li>
<p>Accept that it’s a low nominal return world – when inflation is 2%, a 10% superannuation return is pretty good (and probably not sustainable at that rate). </p>
</li>
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Shane Oliver's Insights - 2018 - a list of lists regarding the macro investment outlook

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<p><span>After five years of strong house price gains in Sydney and Melbourne, the market is cooling, particularly in Sydney (Chart 14).</span></p>
<p><span> In both cities, housing price growth has run at double-digit annual rates over the past five years. However, in the past six months, Sydney house prices have declined 3% and Melbourne price growth has slowed to a 5% annual rate. The rest of the country has had low single-digit house price growth over the whole period.</span></p>
<p>Click <a href="https://www.propertyobserver.com.au/images/2018/1/22/blox4.jpg" target="_blank">here to enlarge.</a></p>
<p><span><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/1/22/blox4.jpg" alt=""></span></p>
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<p><span>The slowdown in Sydney and Melbourne has been driven by a number of factors. </span></p>
<p><span>First, housing supply has ramped up, as an apartment building boom has delivered new dwellings to market.</span></p>
<p><span> Second, prudential settings have been tightened, which has also included an increase in lending rates for investors. </span></p>
<p><span>Third, foreign demand has pulled back, reflecting restrictions on Chinese capital outflows, constraints on lending to foreign buyers by domestic banks and increased local taxes on foreign buyers. </span></p>
<p><span>We expect these factors to continue to weigh on housing price growth in the coming quarters and forecast national housing price growth to slow from the near double-digit rates of recent years to 3-6% in 2018 (Table 16). </span></p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/1/19/FORECAST.jpg" target="_blank">to enlarge.</a></p>
<p><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/1/19/FORECAST.jpg" alt=""></p>
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<p><span>We expect housing construction to remain at a high level over the next 6-9 months </span><span>– </span><span>given a large pipeline of apartment construction that is already underway </span><span>– </span><span>and expect it to be a drag on GDP growth from H2 2018 and in 2019 (Chart 15). </span></p>
<p><span>However, we do not expect a sharp decline in housing prices and expect only a modest decline in construction activity, as both are likely to be supported by strong population growth and low interest rates. Although we see the RBA beginning to lift its policy rate in 2018, we expect only a slow pace of cash rate tightening and some relaxation of current tight prudential settings as the housing market cools. </span></p>
<p>Click here <a href="https://www.propertyobserver.com.au/images/2018/1/19/debt.jpg" target="_blank">to enlarge.</a></p>
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<p><span>A hard landing is possible, but we believe this would require a negative shock from abroad and a sharp rise in the unemployment rate. In short, we do not see a significant local housing imbalance and view Australia as having had a housing boom rather than a bubble (for more on this see </span><span>Downunder Digest: Australian housing: Cooling not crashing</span><span>, 12 December 2017). </span></p>
<p><span><strong>Household debt concerns may be overdone</strong> </span></p>
<p><span>A key concern that has been flagged by the RBA, amongst other observers, is that household debt levels have risen in recent years (Chart 17). </span></p>
<p><span>This concern has a number of dimensions. </span></p>
<p><span>First, if new household debt has been misallocated, then falling housing prices or a rising unemployment rate could threaten financial stability. </span></p>
<p><span>While this could be a concern, we see the recent household debt as having been reasonably well allocated, given tightened prudential settings. We also expect the unemployment rate to fall, rather than rise in the coming quarters. </span></p>
<p><span>Second, slower growth in credit, as the housing boom cools, could crimp consumer spending. However, we see little evidence that the ramp up in household debt in recent years has supported much consumer spending. Unlike the housing price and debt boom of the early 2000s, households have been injecting equity into their houses in recent years, rather than withdrawing it (see </span><span>Downunder Digest: Australia</span><span>’</span><span>s shifting consumer</span><span>, 27 June 2017). </span></p>
<p><span>In addition, although the national household savings rate has fallen, which could be a sign of a wealth effect, it has not fallen in the states that have had housing booms </span><span>– </span><span>New South Wales and Victoria (Chart 18). Instead saving rates have fallen in the mining states, which is likely to reflect the end of the mining boom weighing on incomes, rather than a positive wealth effect. </span></p>
<p><span>Finally, it is also worth keeping in mind that although household debt has risen, driven by a rise in new borrowing, on average, existing mortgage holders have been paying down their mortgages faster than required and thereby building up a buffer against negative income shocks. </span></p>
<p><span>One way to measure this buffer is to look at how much funding households have in their mortgage offset accounts.</span></p>
<p><span> As Chart 17 shows, when these account balances are netted out, the climb in household debt has been much shallower. </span></p>
<p><span>In our view, the key to the outlook for consumption growth is the forecast for household incomes. Strong jobs growth is already supporting a pick-up in household income growth and our central case suggests the tightening labour market will also see wages growth lift in 2018, further supporting household income growth and consumer spending.</span></p>
<p><span> There are already signs that consumer sentiment is lifting (Chart 19). </span></p>
<p>Click here<a href="https://www.propertyobserver.com.au/images/2018/1/19/sneitment.jpg" target="_blank"> to enlarge.</a></p>
<p><span><img src="https://res.cloudinary.com/dz9xllyip/image/fetch/c_scale,w_580,q_auto:good/https://s3-ap-southeast-2.amazonaws.com/po.images/2018/1/19/sneitment.jpg" alt=""></span></p>
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<p><strong>We see the RBA lifting its cash rate in 2018</strong></p>
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<p><span>Given the expected pick-up in growth, tightening labour market and expected rise in wages growth this year, we expect the RBA to begin to normalise its cash rate setting in 2018. </span></p>
<p><span>The cash rate has been at its record low of 1.50% since August 2016 and the RBA has stated that it estimates Australia</span><span>’</span><span>s neutral rate to be around 3.5%, suggesting that monetary policy is currently very stimulatory. As the policy rate setting is well below neutral, we see the RBA as likely to want to start lifting its cash rate as soon as it is confident that wages growth is past its trough. </span></p>
<p><span>Keep in mind that wages growth is usually a lagging indicator of the economy. </span></p>
<p><span>Our central case is that the RBA will lift its cash rate in Q2 2018 although the risk is that it takes a little longer for the central bank to be convinced that wages growth is past its trough and underlying inflation is headed back to target. </span></p>
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Any 2018 property market hard landing requires a shock from abroad and sharp rise in unemployment: HSBC's Paul Bloxham

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<p>Harry Dent, one of the world’s most controversial economic futurists, will be touring Australia again in February.</p>
<p>He will be in Australia from February 24 to March 2 to discuss his latest research findings on the future of the economy.</p>
<p>His pitch will be how to build and protect your wealth during uncertain times which he describes as the greatest social, economic, and political upheaval since the American Revolution.</p>
<p>“I’m convinced that the combination of cheap money, inflated debt, declining demographics and politics will ultimately lead to a (stock) market crash worse than any we’ve ever seen.</p>
<p>"But that doesn’t mean you can’t still make some money in stocks right now. You see, the same forces that will ultimately lead to the next (stock) market crash are also the same forces that continue to drive this bull market “ says Harry.</p>
<p>He suggests Australia is a relative "safe haven."</p>
<p>But he will presumably offer his advice on exiting Australian property markets to a potentially understandably sceptical audience.</p>
<p>Last time he toured in 2014 Harry Dent's worst case scenario was for a post-China bubble burst impacting on Sydney with property prices possibly set to collapse by as much as 60 percent or so.</p>
<p>His controversial forecasts were labelled as "scaremongering" by commentator Chris Joye.</p>
<p>As he did on Harry Dent's earlier 2011 crash forecast, the founder of listed wealth manager Yellow Brick Road Mark Bouris also countered the claims. </p>
<p>Bouris always maintained that Australia was well-positioned to navigate international turbulence.</p>
<p>In 2011 remarks on David Koch’s <em>Sunrise</em> program, Dent begged viewers to sell their homes before the 50 percent crash in prices arrived at their doorsteps.</p>
<p>Dent’s claim was that Australian dwelling values were “9.5 times family incomes”, and should, in his view, be about “half” that level.</p>
<p>Dwelling prices in Sydney now have an $895,000 median, up from $610,000 in early 2014, according to CoreLogic, who have noted a 2 percent fall over the past quarter.</p>
<p>It represents a 46 percent rise since Dent's 2014 warning. <span>Sydney's median dwelling price was around $500,000 in 2011.</span></p>
<p>Blogger Pete Wargent noted in 2014 Dent's "track record has been wildly inaccurate."</p>
<p><a href="https://harrydentlive.com" target="_blank">Next month</a> Harry Dent starts in Perth on Saturday 24<sup>th</sup> February, then Melbourne Monday 26<sup>th</sup> February, Sydney Tuesday 27<sup>th</sup>February, Brisbane Wednesday 28<sup>th</sup> February and even Newcastle on Friday 2<sup>nd</sup>March. </p>
<p>All attendees get copy of Dent’s new best seller Zero Hour.</p>
<p>The early bird pricing is $47.</p>
<p>Ofcourse Dent's most noted tip was that Japan, then on top of the economic world, would suffer a slowdown lasting more than a decade.</p>
<p>It is still pretty much in a coma, he notes, some two decades after the 1991 peak.</p>
<p>Last time he toured he told his audience: "You can't keep bubbles from bursting for ever."</p>
<p>Dent made headlines when he remarked that the Australian property market was like popcorn popping - different markets bursting at different times, noting the high risk of the expansionary China collapse in hurting Australian property prices.</p>
<p>"There is no way there will be a soft landing in China." he suggests even if the government seeks it. </p>
<p>"China's blow will really hit Australia," he said.</p>
<p>Asked on his hit and miss success rate, Dent was forthright.</p>
<p>"I am likely to get 30 or 40% of forecasts wrong in the timing," he said.</p>
<p>His US critics point to his 2005 forecast that the Dow would hit 40,000 by the end of the decade. His local critics point to his 2011 call that property in Australia was set to crash.</p>
<p>Saying it often can be just one piece of information that can provide the clue, his late 1980s Japanese forecast was based on his premise that people slow in spending way ahead of retirement, from 46 years onwards.</p>
<p>Asked how much understanding the pysche of the population of a city or country was helpful in understanding market movement, and he agreed.</p>
<p>"You are right, yes markets do go up and down together, but to different degrees.</p>
<p>"But the bubble will be here and there, say Melbourne and Brisbane."</p>
<p>Harry is the founder and senior editor at Dent Research, where he seeks to identify and study demographic, technological, consumer spending and geopolitical trends to forecast economic booms and busts well ahead of the mainstream.</p>
<p>His latest publicity blurb put out by Max Markson seeks to address his many critics.</p>
<p>"Mainstream media pundits are calling me crazy, an idiot, and a quack.</p>
<p>"But that’s nothing new…</p>
<p>"After all, I’ve been making predictions that people are sceptical of for decades… but one after another keeps coming true anyway!"</p>
<p>{mijopolls 149}  </p>
<p> </p>
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jchancellor-FAypfDUnLy

With a 46 percent property price rise, will anyone believe futurist Harry Dent on his Australian tour next month 

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<div>
<p>The young high flying Sydney investor Nathan Birch has given his mildly bearish property predictions for 2018.</p>
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<div>
<p>"We are entering into a period of uncertainty," the face on Binvested forecast.</p>
<p>"Tighter lending regulation from APRA has made it difficult for buyers all over Australia to get finance.</p>
<p>"This has meant fewer buyers across all markets," says the young investor who knows just what it is like to seek finance and to sell in tightened circumstances.</p>
<p>Birch recently confirmed he had "briefly" fallen behind on "one or two mortgages" citing increased lending restrictions arising from the much-heralded Australian Prudential Regulation Authority investor crackdown.</p>
<p>He predicts it is likely the market will stagnate over the next 12 to 18 months.</p>
<p>"But, despite what the general population may think, this is excellent news for investors especially for those who are cashed up and finance ready.</p>
<p>"This year will be an excellent time to buy."</p>
<p>"While many are finding it difficult to get finance, those who are ready to pounce will have the opportunity to pick up properties for cheap."</p>
<p>He suggests the next 12 to 18 months will offer a "small window of opportunity" to buy properties that are ‘on sale’, before the market picks up speed again.</p>
<p>He says it was the type of market that he built my foundation portfolio on back in 2004 to 2009 as having fewer people buying properties, "it becomes easier to negotiate a good price."</p>
<p>"Vendors become more flexible with the amount they are willing to accept, because at the end of the day, they need to sell.</p>
<p>"If they want to sell, they have to settle for less."</p>
<p>Birch's opinion is that rates will continue to remain low over the next 12 to 18 months, unchanged for some time.</p>
<p>"The banking system is currently in unchartered waters. If the RBA was to increase the cash rate now, millions of Australians would find it difficult to repay their mortgages.</p>
<p>"This would have a flow on effect; with less consumer spending causing damage to the economy.</p>
<p>"The APRA changes have done what a rate rise would normally do – without causing financial strain for those with existing mortgages."</p>
<p> </p>
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APRA credit squeeze victim Nathan Birch sees stagnate property markets in 2018

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<p class="x_MsoNormal"><span lang="EN-GB">Mozo property expert Steve Jovcevski expects prices to further cool in the major housing market of Sydney, while Melbourne will enjoy a spike in property values.</span></p>
<p class="x_MsoNormal"><span lang="EN-GB"> Brisbane houses should slowly increase while Hobart will continue to be the star performer.</span></p>
<p class="x_MsoNormal"><span lang="EN-GB"> </span></p>
<p class="x_MsoNormal"><strong><span lang="EN-GB">Sydney – property market decrease of -5%</span></strong></p>
<p class="x_MsoNormal"><span lang="EN-GB">The Sydney housing market plateaued in 2017 and will drop slightly over 2018, but we’re unlikely to see a dramatic bubble burst. Signs pointing to a slower market include lower clearance rates and higher than average housing supply. </span><span lang="EN-GB">Clearance rates could continue to be low in Sydney due to rampant under-reporting of sale prices by agents. It is possible that actual clearance rates are even lower than reported. </span><span lang="EN-GB">The market is expected to pick up in Autumn but the Spring season, typically a boom period for the Sydney property market, will be tough in 2018. First home buyer demand will be stronger, due to lower competition and ongoing low rates.</span></p>
<p class="x_MsoNormal"><span lang="EN-GB"> </span></p>
<p class="x_MsoNormal"><strong><span lang="EN-GB">Melbourne – property market increase of 5-7%</span></strong></p>
<p class="x_MsoNormal"><span lang="EN-GB">Melbourne will continue to be a first home buyer’s market with more affordable housing in comparison to Sydney. Melbourne is experiencing strong population growth and while the market will continue to grow, it will slow compared to the 10% growth experienced in 2017. </span><span lang="EN-GB">It is anticipated that Melbourne clearance rates will also drop from 70% to 60% due to the slowing of first home buyer activity and a drop in pent-up demand. Apartment markets may struggle due to oversupply issues in some inner-city locations.</span></p>
<p class="x_MsoNormal"><span lang="EN-GB"> </span></p>
<p class="x_MsoNormal"><strong><span lang="EN-GB">Perth – property market increase of 2-4%</span></strong></p>
<p class="x_MsoNormal"><span lang="EN-GB">The Perth housing market has stabilised in the last quarter although the market experienced a slight housing price drop over the last year. The Perth housing market has struggled over the past few years and is now set to enjoy a small amount of growth which will continue to climb. The city boasts an affordable first home price point compared to other major metropolitan areas in Australia and is experiencing steady population growth. The local economy is slowly strengthening after overcoming the mining collapse and now enjoys a more secure local economy.</span></p>
<p class="x_MsoNormal"><span lang="EN-GB"> </span></p>
<p class="x_MsoNormal"><strong><span lang="EN-GB">Canberra – property market increase of 7%</span></strong></p>
<p class="x_MsoNormal"><span lang="EN-GB">Low vacancy rates continue to support the Canberra property market with an adequate supply of interstate investors seeking good yield. Demand in the first buyer space continues and the local economy remains consistently strong. Migration to Canberra also continues as Australians seek out the capitals excellent job market, lifestyle opportunities and housing affordability.</span></p>
<p class="x_MsoNormal"><span lang="EN-GB"> </span></p>
<p class="x_MsoNormal"><strong><span lang="EN-GB">Brisbane – property market increase of 5%</span></strong></p>
<p class="x_MsoNormal"><span lang="EN-GB">Brisbane has experienced steady population grown due to the affordable lifestyle it offers. Many Australians are migrating to Brisbane from more expensive city centres due to housing affordability and a stable local market. 2017 saw a steady increase of 4-5% and it is predicted this slow and steady rise will continue for years to come.</span><span lang="EN-GB"> Apartment markets may struggle compared to houses due to an oversupply in some areas.</span></p>
<p class="x_MsoNormal"><span lang="EN-GB"> </span></p>
<p class="x_MsoNormal"><strong><span lang="EN-GB">Hobart – property market increase of 10%</span></strong></p>
<p class="x_MsoNormal"><span lang="EN-GB">Hobart posted a whopping 12% growth in the past year, and is expected to experience similar growth in 2018. Compared to other Australian metropolitan centres, Tasmania boasts some of the country’s most affordable housing. With close proximity to Melbourne, low vacancy rates and consistently high rental demand it is an excellent investment prospect. The local economy continues to improve and lifestyle migration is expected to be a major factor in driving up house prices. </span></p>
<p class="x_MsoNormal"><strong><span lang="EN-GB"> </span></strong></p>
<p class="x_MsoNormal"><strong><span lang="EN-GB">Adelaide – property market increase of 3-4%</span></strong></p>
<p class="x_MsoNormal"><span lang="EN-GB">Slow is steady is the track record for Adelaide's housing market and this continues in 2018. The ideal market for investors, housing prices are not prone to sharp price rises and dips. In the last year, Adelaide enjoyed a 3-4% price increase and this is expected for 2018. An increase in new apartments may increase house prices slightly, but generally, Adelaide will enjoy slow and consistent property growth.</span></p>
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Hobart to remain the property star in 2018: Mozo's Steve Jovcevski 

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<p>DPN’s Managing Director, Sam Khalil, looks back on 2017. He gives us his take on property investment around the country and what lies ahead for 2018. </p>
<p class="p1"><span class="s1"><strong>A sobering year as APRA measures take hold</strong></span></p>
<p class="p1"><span class="s1">What a year that was. 2017 was perhaps the bleary eyed come down from the last five years of heightened excitement and frenzied activity.<span class="Apple-converted-space"> </span></span></p>
<p class="p1"><span class="s1">Measures introduced by APRA last year have had an instant effect on banks and investor lending. It has put the brakes on the lending system. Banks have increased the cost of interest only investor loans. This has had an effect on the number of investors entering the market. This in turn has cooled down prices.</span></p>
<p class="p1"><span class="s1"><strong>Sydney slow down</strong></span></p>
<p>The APRA measures have taken greatest effect in Sydney. We’ve seen clearance rates drop from the record highs of 85% down to around 55%, its lowest level for two years. And in September, traditionally, the strongest period of the year for Sydney, recorded on average 68% clearances. All this is despite a drop in the number of properties on sale. All this indicates how cautious and muted the Sydney market is.</p>
<p>However, those who speak of Sydney’s property market demise or talk about a “bubble bursting” are, in my opinion, taking a myopic view. From 2012 to 2017, Sydney was Australia’s best performing market. Let’s not forget that from 2004 to 2012 Sydney was the worst performing market. In the average returns from 2017 you’ll see quite a sensible growth across Sydney. When you average it out the returns are under 10% in all suburbs over those eighteen years. Sydney is now returning to what it normally does in the property cycle. It’s having a minor correction or plateau and will slowly grow again.</p>
<p class="p1"><span class="s1"><strong>Brisbane steadily taking off</strong></span></p>
<p class="p3">Brisbane is beginning to move. It won’t have as dramatic growth as Sydney or Melbourne. But it’s being helped along by increased interstate migration especially in south east Queensland. Brisbane is over supplied in the inner city market, particularly in apartments. This has led to a real plunge in prices for inner city flats, down by 6 per cent over the year. However Brisbane is slowly taking off. There’s some serious money rolling into the city: like a $3 billion casino project in Brisbane’s CBD. And there’s hefty investment into infrastructure projects; investment in rail and road. Rental prices are growing. You won’t see spikes or plunges in the Brisbane market. All indications are that it will be the steadiest market for some time.</p>
<p class="p1"><span class="s1"><strong>Melbourne still buoyant</strong></span></p>
<p>Melbourne has been on a strong upward trajectory and this year overtook Sydney for percentage increase. It has had a 10% value growth over 2017 according to Core Logic. Melbourne suffered a glut in apartments recently and is still recovering from that. Yet while housing prices continue to grow in Melbourne they’re not at their dizzying peaks. It is high levels of overseas</p>
<p>migration that is keeping the housing market buoyant, which is leading to constant housing demand.</p>
<p class="p1"><span class="s1"><strong>Hobart, Adelaide and Perth</strong></span></p>
<p>Hobart has been a surprising achiever over the last year. Its growth of 13.6% capital gains is a record for any capital city. This is partly due to strong interstate migration and partly because of its scarcity of buildings. Another factor is the flourishing tourism market. This is helped by the MONA museum and its cultural attractions. However, with a small population it’s hard to gauge the city’s long-term prospects.</p>
<p>Adelaide has remained steady. Both it and Darwin don’t have enough critical mass to yet see a surge in prices. Perth is slowly hauling its way back from the mining collapse and is still some way from being competitive.</p>
<p class="p1"><span class="s1"><strong>Wollongong<span class="Apple-converted-space"> </span></strong></span></p>
<p class="p1">Wollongong is the third most expensive city in Australia following Sydney and Melbourne. Land development is still tight in that region. The demand for property remains very high. It’s attractive to both investors and homebuyers due to its proximity to Sydney.</p>
<p class="p1"><span class="s1"><strong>So where does all this leave us?</strong></span></p>
<p class="p1"><span class="s1">As I’ve said before, Australia is not one single property market but many. There are as many property markets as there are suburbs. As the above breakdown shows, while parts of Sydney are at a plateau, other areas are thriving. So some investors may be wary of entering the market next year. But the canny investor will use the reduced competition, low interest rates and affordable house prices to strategically snap up a bargain.</span></p>
<p class="p1"><span class="s1"><em><span>SAM KHALIL</span> is founder and director of <a href="https://www.dpn.com.au/" target="_blank">Direct Property Network</a>.</em></span></p>
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Sam Khalil’s property investment outlook for 2018

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<h1>Vital Signs: five economic red flags to watch for in 2018</h1>
<p><img src="https://images.theconversation.com/files/196084/original/file-20171123-6072-13xyzhk.jpg?ixlib=rb-1.1.0&amp;q=45&amp;auto=format&amp;w=754&amp;fit=clip" alt="File 20171123 6072 13xyzhk.jpg?ixlib=rb 1.1"></p>
<p>We don’t know for sure if any of these things could happen, but if they do we’re in for a wild ride in 2018. <span class="attribution"><span class="source">Image sourced from shutterstock.com</span></span> <span><a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">Richard Holden</a>, <em><a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a></em></span></p>
<p><em>Vital Signs is a weekly economic wrap from UNSW economics professor and Harvard PhD Richard Holden (@profholden). Vital Signs aims to contextualise weekly economic events and cut through the noise of the data affecting global economies.</em></p>
<p><em>This week: A break from weekly data to look forward to the year ahead.</em></p>
<hr>
<p>With a data-light week, and the end of 2017 looming, this is a good time to touch on five issues to watch out for in 2018.</p>
<h2>1. Trump loses patience with NAFTA</h2>
<p>US President Donald Trump has made clear his contempt for a variety of international agreements to which the US is a signatory. The North American Free Trade Agreement is certainly one of them. 2018 could be the time when Trump engineers either a renegotiation of NAFTA, or (scarily) a US exit from it.</p>
<p>Right now, the administration is trying to extract concessions from China and Mexico on the deal, and has set a March 2018 deadline for an agreement.</p>
<p>A US exit from NAFTA would be calamatous. The three economies have become heavily integrated since NAFTA began, and it’s almost hard to imagine what the US economy would look like without, for example, cheap goods and agricultural produce from Mexico.</p>
<h2>2. We find out Australia had a housing bubble, because it bursts</h2>
<p>Is there a bubble in the Australian housing market? I have consistently said that I don’t know, and I wouldn’t know how to prove it even if there was. But there are some troubling markers, including investment bank <a href="https://neo.ubs.com/shared/d1QtAq68bSw15m/?off_id=AC201709E304806129W1757731499&amp;ma=X47535154596E5669&amp;camp_id=EM%3AUNKW%3A2017-09%3A10%3AC" target="_blank">UBS’s report</a> warning about the potentially large number of so-called <a href="https://theconversation.com/how-liar-loans-undermine-sound-lending-practices-87073" target="_blank">“liar loans”</a>.</p>
<p>I’ll add one more marker that I haven’t heard discussed before. <a href="https://thejollyswagmen.com/new-blog/2017/11/15/28-liar-loans-peter-white" target="_blank">A respected mortgage industry insider said</a> the data in the UBS report doesn’t make sense, and that mortgage brokers aren’t encouraging people to falsify loan applications. But the same expert said any instances of bad behaviour are isolated, that statistics aren’t facts, and he rejected the idea that incentive payments to brokers encourage them to push bigger loans to borrowers. Basically, “believe me!”</p>
<p>2018 should give us a pretty good read on whether there will be a slow deflation of Sydney and Melbourne property prices (at least in real terms), or whether there will be an abrupt reduction in prices, a series of fire sales, and trouble for the banks. I think the balance of evidence now suggests the latter.</p>
<h2>3. There’s a ‘take back’ of the Brexit vote</h2>
<p>The UK will continue to negotiate its exit from the European Union, and 2018 will be both important and consequential. There is a very specific timeline for the UK’s exit – 11pm GMT, Friday March 29, 2019 to be exact.</p>
<p>The four big issues are: (i) what the UK owes the EU financially, (ii) the Northern Ireland border, (iii) what happens to UK citizens living in the EU, and EU citizens living in the UK, and (iv) the biggest of all – trade.</p>
<p>Theresa May – when not defending inappropriate behaviour from her male colleagues, or falling for sophomoric pranks when speaking in public – is sticking to her “hard Brexit” line. 2018 will show whether this is even vaguely possible. I strongly suspect not – and there are a whole host of interesting things that could happen.</p>
<p>One, May could easily lose the prime ministership. Two, there could end up being another vote to “take back” the Brexit vote. If you think that’s crazy then <a href="http://podcast.cnn.com/the-axe-files-david-axelrod/episode/all/1TFnFglOwOT80L/f3h850">listen to Tony Blair</a> discussing how it could happen.</p>
<p>All of this could cause major upheaval in financial markets. London remains a fundamentally important international capital market.</p>
<h2>4. US financial regulation softens</h2>
<p>Janet Yellen’s departure as US Federal Reserve Chair in February, and her replacement by Jay Powell, is unlikely to materially alter US monetary policy. Expect gradual rate rises throughout 2018.</p>
<p>What could differ – and not in a good way – is the Fed’s stance on financial regulation. Powell is thought to be more hostile to Dodd-Frank (as the regulatory response to the Great Recession is known) than Yellen. 2018 will be revealing in this regard, because the Trump White House is known to despise those regulations and there could be a concerted effort to remove them using whatever means available.</p>
<p>This would be dangerous and foolish, and lay the groundwork for the next financial crisis.</p>
<h2>5. The European experiment fails</h2>
<p>With a wave of populist sentiment across Europe, and German Chancellor Angela Merkel having a hard time forming a coalition, there is the slim but scary prospect of the EU essentially disintegrating. This could be the result of a sovereign default by a major country like Italy or Spain, that is too big to bail out. Or it could come from a German government that is no longer willing to support the European Central Bank the way it has to date.</p>
<p><img src="https://counter.theconversation.com/content/87851/count.gif?distributor=republish-lightbox-basic" alt="The Conversation" width="1" height="1">It could well be that none of the worrying scenarios outlined above actually occur. But any number of implicit and explicit deadlines make 2018 look like a more eventful year than most.</p>
<p><span><a href="https://theconversation.com/profiles/richard-holden-118107" target="_blank">Richard Holden</a>, Professor of Economics and PLuS Alliance Fellow, <em><a href="http://theconversation.com/institutions/unsw-1414" target="_blank">UNSW</a></em></span></p>
<p>This article was originally published on <a href="http://theconversation.com" target="_blank">The Conversation</a>. Read the <a href="https://theconversation.com/vital-signs-five-economic-red-flags-to-watch-for-in-2018-87851" target="_blank">original article</a>.</p>
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Australia's troubling housing bubble markers rank among the five economic red flags for 2018: Richard Holden

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<p><span style="line-height: 1.3em;">Scentre Group announced the sale of four local shopping centres amounting to $783 million due to settle in the third quarter of 2015.</span></p>
<p><span style="line-height: 1.3em;">Releasing their results for the six months to June 30 2015, funds from operations came to 11.38 cents per security and distribution of 10.45 cents per security, keeping in line with forecasts.</span></p>
<p><span style="line-height: 1.3em;">Scentre Group expects to meet its 2015 full year FFO forecast of 22.5 cents per security </span>making<span style="line-height: 1.3em;"> for 3.5% growth and a distribution forecast of 20.9 cents per security. </span></p>
<p><span style="line-height: 1.3em;">Scentre Group </span>chief<span style="line-height: 1.3em;"> executive officer Peter Allen said the group is</span><span style="line-height: 1.3em;"> pleased with these operational results, which reflect the focus of driving value from our high quality shopping centre portfolio. </span></p>
<p><span style="line-height: 1.3em;">"In addition to having 14 of the top 20 shopping centres in Australia by annual sales, each of Bondi Junction and Westfield Sydney now generate annual sales in excess of $1.0 billion," he said.</span></p>
<p><span style="line-height: 1.3em;">“The Group is committed to creating extraordinary places connecting and enriching communities, and this year has announced a number of major initiatives, including $825 million of development starts, new services to improve the shopper and retailer experience, and an improvement in the quality of the Australian portfolio.</span></p>
<p><span style="line-height: 1.3em;">Gross proceeds of recent sales account $783 million, a 3.4% premium to 30 June 2015 book values.</span></p>
<p><span style="line-height: 1.3em;">The Group maintains its forecast FFO of 22.5 cents per security, representing 3.5% growth with a distribution forecast of 20.9 cents per security for the twelve months ending </span></p>
<p><span style="line-height: 1.3em;"> </span></p>
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